How Good is the Australia-China Relationship?

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How Good is the Australia-China
Relationship?

Managing Australia’s Diplomatic
Relationship with China

                                       Abstract
It is easy for governments to disguise their inability to manage complex relationships by
resorting to finger-pointing and name-calling. But the over-investment in emotion usually
masks an under-investment in thinking. The stridency that distinguishes contemporary
government pronouncements on China and Australia’s relationship with China is alarmist
and alarming. We need a more considered and deliberate approach to the relationship with
China if we are to avoid the pitfalls of over-reaction and realise the opportunities that a
managed engagement with China will inevitably bring. This means investing in professional
expertise in the management of the Australia-China relationship, and promoting the
independence of specialist China commentators.

Allan Behm
June 2020

   Australia-China Relations                                                              1
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   Australia-China Relations                                                                 2
Introduction
When The Australian newspaper labels a speech by Australia’s Foreign Minister as
“strident”, strident it doubtless is.1 And when The Australian’s Foreign Editor titles his
commentary “Marise Payne the Avenger stands up to Beijing’s liars”,2 the stridency is
ratcheted up a notch or two. Stridency, however, generally reveals insecurity and a lack of
poise. The over-investment in emotion masks an under-investment in thinking.

The Foreign Minister knows what she’s doing. It may appear that she’s delivering a message
to Beijing – a message that Australia’s energetic advocacy of an “independent international
inquiry” into COVID-193 has already delivered loud and clear. But the more immediate effect
of her amplifying criticism of China is twofold. It plays into the more muscular anti-China
tone emanating from the White House and Secretary Pompeo. And it channels the
bellicosity of the domestic ‘anti-Beijing lobby’ that seems to be expanding its influence over
the government’s China policy. Given the unmistakeably political tone of her speech
delivered at the Australian National University’s (ANU) National Security College,4 it would
be surprising if it had been drafted in the Department of Foreign Affairs and Trade, or based
on the considered advice of the Office of National Intelligence. It does not achieve the
standards of intelligence and tact that characterise deliberate and measured diplomacy. 5

It may appear gratuitous to advise Prime Minister Scott Morrison or Foreign Minister Marise
Payne on how to manage Australia’s diplomatic relationship with China. They have
departments and agencies available to them to do that. It would be useful, however, were
they to open a broader national conversation on how Australia should conduct its

1
  See Ben Packham, “Payne calls out China over ‘false’ facts and ‘climate of fear’ “, The Australian, 17 June
  2020 https://www.theaustralian.com.au/nation/chinese-disinformation-undermining-democracy-payne-
  warns/news-
  story/c9b9233a3698eefd28ebce57e13b0993?utm_source=TheAustralian&utm_medium=email&utm_campai
  gn=editorial&utm_content=TATodaysHeadlinesSubTATodaysHeadlines&utm_source=TheAustralian&utm_m
  edium=email&utm_campaign=editorial&utm_content=TATodaysHeadlinesSubAM
2
  See Greg Sheridan, “Marise Payne the Avenger stands up to Beijing’s liars”, The Australian, 16 June 2020
  https://www.theaustralian.com.au/nation/politics/marise-payne-the-avenger-stands-up-to-beijings-
  liars/news-story/f73d236d5e13b533c9b42414f0907b64
3
  See Stephen Dziedzic, “Australia started a fight with China over an investigation into COVID-19 – did it go too
  hard?”, ABC News, 20 May 2020 https://www.abc.net.au/news/2020-05-20/wha-passes-coronavirus-
  investigation-australia-what-cost/12265896
4
  See Marise Payne, “Australia and the world in the time of COVID-19”, speech delivered at the National
  Security College, ANU, on 16 June 2020 https://www.foreignminister.gov.au/minister/marise-
  payne/speech/australia-and-world-time-covid-19
5
  In his classic manual A Guide to Diplomatic Practice, Sir Edward Satow defined diplomacy as “the application
  of intelligence and tact to the conduct of official relations between governments”. See Sir Edward Satow, A
  Guide to Diplomatic Practice (London: Longmans, Green and Co, 1957), p. 1.

    Australia-China Relations                                                                                  3
relationship with China at a time when China is becoming ever more assertive – to the point
of ham-fistedness – and the US is losing its authority and self-conviction as a global leader.6
It would be useful to hear the views of those experienced in managing Australia’s
relationship with China, both those in government and those in the wider business,
commercial and academic communities who have been handling the business of Australia’s
day-to-day relations with China for the best part of half a century.

Of course, the Prime Minister and the Foreign Minister could further exacerbate matters by
paying greater heed to the excited voices who are constantly calling for Australia to
constrain its links with China’s state-owned corporations that might invest in Australia. They
could further stiffen foreign investment rules, including forcible divestment of previously
approached investment “in order to close security gaps in Australia’s foreign investment
regime”.7 They could look for further ways to reduce Australia’s trade dependency on China
in the minerals and energy sector. They could also look for ways to ‘diversify’8 Australia’s
markets away from China (without, of course, being able to identify exactly who is going to
take up the slack in minerals and energy exports).9 They could insist that the universities
become less dependent on Chinese students for their educational services exports, while
simultaneously cutting research links with Chinese universities.10 And they could fund
advertising campaigns to attract tourists from other countries to visit Australia, rather than
relying on people from China.

They could also accept the advice proffered by these same voices encouraging the
government to speak loudly, plainly and often on China’s human rights abuses against the
Uighurs. They could also push back harder against China’s imposition of direct rule on Hong
Kong (though whether they would welcome a significant influx of Hong Kong citizens as
immigrants is doubtful). Then they could deploy the Royal Australian Navy in support of US
Freedom of Navigation operations in the South China Sea within China’s 12-mile limit claims.
They could also denigrate further the Chinese Communist Party as the governing party of
China, and trumpet Australia’s ‘victory over China’ in supporting a WHO convened

6
  For observations on the linkage between authority and power, see Allan Behm, “A return to diplomacy could
  save China from itself”, The Strategist (ASPI), 3 December 2019 https://www.aspistrategist.org.au/a-return-
  to-diplomacy-could-save-china-from-itself/
7
  See Phillip Coorey, “Tighter tests for foreign investors”, The Australian Financial Review, 4 June 2020
  https://www.afr.com/politics/federal/tighter-tests-for-foreign-investors-20200604-p54zj9
8
  See Peter Jennings, “We need to reduce our dependence on China, and have the courage to call it out when
  required”, The Guardian (Australia), 1 May 2020
  https://www.theguardian.com/commentisfree/2020/may/01/we-need-to-reduce-our-dependence-on-china-
  and-have-the-courage-to-call-it-out-when-required
9
  See James Laurenceson, “Reality Check on finding new export markets: China’s demand dwarfs the rest”, The
  Sydney Morning Herald, 28 May 2020, reprinted in Pearls and Irritations, 1 June 2020
10
   See Peter Jennings, “Party’s over for the bullies of Beijing”, The Australian, 23 May 2020
  https://www.theaustralian.com.au/inquirer/partys-over-for-the-bullies-of-beijing/news-
  story/89ed66c470f8012d22096a43f720044d

    Australia-China Relations                                                                              4
“independent international inquiry” into the coronavirus epidemic. And, of course, they
could ramp up claims of capital punishment barbarism in demanding commutation of the
death penalty imposed on the Australian citizen found guilty of drug smuggling by the court
in Guangzhou.

The more unfocused energy Australia expends on these issues, important though they are,
the more impotent Australia will appear, and the less effective Australia’s calls are likely to
be. And, of course, the more excited we will become in our public rhetoric.

Since the establishment of diplomatic relations in 1972, the bilateral relationship has had its
ups and downs.11 The past couple of years, however, have seen the relationship fall to its
lowest ebb. China comes in for considerable criticism in the Australia media and in various
Parliamentary committees. Commentators accuse China of seeking world domination,
channelling the more hawkish members of the US Congress who encourage Australia “to
play a crucial role in helping the United States win a new “cold war” against an increasingly
expansionist Chinese Communist Party”.12 The former Director-General of ASIO was
reported late last year as warning that China was using its “insidious” foreign interference
operations to “take over” Australia’s political system. That would be tantamount to an
attack on Australia’s sovereignty.13

SOURCES OF ANALYSIS AND ADVICE

For policy advice on economic and social policy, governments have increasingly turned to
external advice providers, particularly the ‘big four’ consulting organisations – Deloitte,
Ernst and Young, KPMG and PwC. On foreign policy and national security issues, however,
governments continue generally to rely on DFAT, Defence and the intelligence community
for advice. And because these institutions are not subject to public performance scrutiny,

11
   For a concise review of the early years of the relationship see Stephen sherlock, “Australia’s Relations with
  China: What’s the Problem?”, Current Issues Brief 23 1996-97, Commonwealth Parliamentary Library
  https://www.aph.gov.au/sitecore/content/Home/About_Parliament/Parliamentary_Departments/Parliamen
  tary_Library/Publications_Archive/CIB/CIB9697/97cib23
12
   See Matthew Knott, “ ‘They want world domination’: Australia urged to join ‘cold war’ on China”, The
  Sydney Morning Herald, 9 June 2020 https://www.smh.com.au/by/matthew-knott-hvf2k
13
   See AAP, “China is seeking to ‘take over’ Australia’s political system, former Asio chief claims”, The Guardian
  (Australia), 22 November 2019 https://www.theguardian.com/australia-news/2019/nov/22/china-is-
  seeking-to-take-over-australias-political-system-former-asio-chief-claims

     Australia-China Relations                                                                                   5
the quality of that advice is largely unknown. But if it does feed the unnuanced stridency
that distinguishes the government’s current rhetoric, the advice is at least tendentious if not
fundamentally inadequate. Their advice needs to accommodate a greater range of views
and choices than seems currently to be available to government. That advice can only come
from external sources, in the same way as advice in other major policy domains comes from
consultants.

The Commonwealth government has funded the creation of foreign and defence policy
centres at the ANU, and has supported centres at Melbourne and Sydney universities.
Government departments have established relationships with a range of external advice
providers, including universities, several think tanks and other small organisations. The
funding streams associated with these centres are fluid, rendering the centres vulnerable to
a stop-start existence and serious challenges to both the continuity and continued
investment in subject-matter expertise. We return to this issue below. At one level, this
reveals an awareness in government that additional professional resources are needed. At
another, it reveals that government is unwilling to invest in a sustainable and enduring
national resource base, preferring to ‘shop around’ and ‘cherry pick’.

Australia is not well endowed when it comes to publicly available sources of knowledge and
advice on how to manage an international relationship as complex as that between
Australia and China. The Universities of Melbourne and Sydney boast substantial Chinese
language programs, attended mostly by native Chinese speakers who pursue courses in
subjects such as advanced translation.14 These are lucrative sources of university income,
but do not add to Australia’s knowledge of China. Latrobe University has a small China
Studies Research Centre which claims to provide “a dedicated platform to enhance the
calibre and quantum of China-related research drawn from across the University”.15 Its
focus is largely antiquarian and archaeological.

Fourteen Australian universities host Confucius Institutes, the Chinese government’s Office
of Chinese Language International (known as Hanban)16 employing the Chinese director and
staff. The Confucius Institutes claim to focus on Chinese language and culture. But, unlike
other soft power instruments funded by foreign governments – the Alliance Française, the
British Council, the Dante Alighieri Society and the Goethe Society for example – the
Confucius Institutes are evidently subject to China’s direct political and funding control, and
have sought to represent China’s political and social views on Australian campuses. The

14
   See Anne McLaren, “Chinese Studies in Australian Universities: A Problem of Balance”, Asian Studies
  Association of Australia, Australian National University workshop Report, 22 November 2019
  http://asaa.asn.au/chinese-studies-in-australian-universities-a-problem-of-balance/
15
   See Latrobe University, China Studies Research Centre https://www.latrobe.edu.au/china-centre/research-
  activities
16
   See the Hanban website http://english.hanban.org/node_10971.htm

     Australia-China Relations                                                                           6
government and the universities are rightly concerned at the implications for academic
freedom and political interference.

In response to the Australian government’s Foreign Espionage and Interference Act 2018,
Australian universities have begun to renegotiate their agreements with Hanban in order to
preserve academic freedom, protect the universities against foreign interference and to
comply with the Foreign Interference Transparency Scheme.17 While the Confucius
Institutes certainly play a role in China’s exercise of its soft power (their capacity for
espionage being relatively limited), they do not add appreciably to Australia’s understanding
of how China goes about realising its economic, political and social interests, and how
Australia might be best positioned to manage its relationship with China.

The Australian National University and the University of Technology Sydney (UTS) host
research centres that investigate contemporary Chinese economic and political activities,
providing their research to both the domestic and international academic markets. The
Australia-China Relations Institute (ACRI) at the UTS18 comprises seven staff members who
focus on the dynamics of the Australia-China relationship in general. ACRI has been subject
to some adverse academic criticism,19 though much of the criticism appears to result from
the appointment of former Labor Premier of NSW and former Australian Foreign Minister
Bob Carr as the inaugural Director of ACRI and Professor of International Relations and on
the initial funding of the Institute by Chinese entrepreneurs.

Since its establishment, the ANU has dedicated significant resources to the study of Chinese
language, history and culture at the undergraduate level in the Faculty of Asian Studies. But
the study of contemporary China has long set the ANU apart from other Australian
universities. The Contemporary China Centre in the Research School of Pacific Studies built
an excellent reputation among international “China watchers” as China progressively moved
from the immediate post-revolution years to the gradual opening up at the end of the
Cultural Revolution.20

Structural changes at the ANU saw the emergence of the China Institute in 2008 and, as a
result of Prime Minister Kevin Rudd’s wish for a specialist contemporary China centre at the
ANU, the establishment of the Australian Centre on China in the World (CIW) as part of the
ANU College of Asia and the Pacific in 2010. Until 2017, the CIW was a stand-alone research

17
   See “Foreign Influence Transparency Scheme”, Department of Foreign Affairs and Trade
  https://www.dfat.gov.au/international-relations/Pages/foreign-influence-transparency-scheme
18
   See UTS, Australia-China Relations Institute, “About ACRI” https://www.australiachinarelations.org/about-
  us
19
   Se, for example, James Leibold, “The Australia-China Relations Institute doesn’t belong at UTS”, The
  Conversation, 5 June 2017 https://theconversation.com/the-australia-china-relations-institute-doesnt-
  belong-at-uts-78743
20
   For a short historical overview, see “ANU China studies: History” http://ciw.anu.edu.au/about/anu-china-
  studies

     Australia-China Relations                                                                                 7
centre. A combination of staff movements and financial management issues21 prompted a
review in 2017, which saw some of the CIW’s research and teaching responsibilities
distributed across the university’s seven colleges, with the CIW becoming a research hub
that fosters cross-campus, national and international research collaboration.22 At present,
CIW has one full-time academic staff member, with an administrative manager and two
part-time professional staff. As a research hub, it supports the research of approximately
sixty members across the university.

There are pros and cons regarding ‘hub and spoke’ nature of the CIW. While the
concentration of China experts under one roof may afford the centre greater bulk and a
more cohesive image, CIW’s ability to stretch across the ANU’s colleges provides a range of
subject-matter experts who might otherwise remain invisible. And the fact that the
Department of Defence has invested substantially in commissioning sustained geo-
economics advice drawn from the various ANU colleges suggests that the hub approach is
viable and fit-for-purpose.23

The Perth USAsia Centre24 is a small research centre attached to the University of Western
Australia. Its remit covers the US and Asia with a focus on issues of direct relevance to
Western Australia. With a staff of thirteen, it runs a useful events and outreach program,
and commissions papers from external contributors. It has no evident expertise on China or
on Australia’s relations with China.

The Asia Society (Australia), with offices in Melbourne and Sydney, is the Australian
presence of the Asia Society, founded in 1956 by John D. Rockefeller III, based in New York.
The Australian division consists of eleven staff members who produce an ambitious range of
development and analytical products, co-opting independent authors and presenters, and
providing speaking opportunities for senior visitors from Asia, international experts and
Australian political leaders. As the Asia Society (Australia) notes on its website, its presence
in Australia “also serves to bring Australian perspectives on Asia to the United States and
the wider region, as well as to bring American and Asian policy thinking to Australia”.25

Also with an all-of-Asia remit, AsiaLink is a non-academic department of the University of
Melbourne, supported by the philanthropic Myer Foundation. Like CIW, it has also received
substantial federal government funding. With a staff of six, and two advisors, AsiaLink hosts
speaker events and provides analysis and commentary on its website. There is little by way

21
   See Primrose Riordan, “ANU’s Chinese studies centre in disarray: review”, The Australian, 22 February 2018
  https://www.theaustralian.com.au/higher-education/anus-chinese-studies-centre-in-disarray-review/news-
  story/cdf4d49360658a43b340644e0ec04982
22
   See the CIW website “About” http://ciw.anu.edu.au/about
23
   See the CIW website “Geoeconomics” http://ciw.anu.edu.au/research/strategic-research-
  spoke/geoeconomics
24
   See the Perth USAsia website https://perthusasia.edu.au/our-focus
25
   See The Asia Society website https://asiasociety.org/australia/asia-society-policy-institute-australia

     Australia-China Relations                                                                                  8
of specialist China analysis or commentary, and AsiaLink does not retain specialist China
research capabilities.

The Lowy Institute and The Australian Strategic Policy Institute (ASPI), both of which receive
annual Commonwealth government funding, frequently publish opinion pieces on Chinese
policy and strategy. Neither would claim, however, to be a specialist institution on Australia-
China relations. Both Institutes provide extensive Asia and broader international analysis
and commentary on their respective websites, and both retain staff members with direct
experience of China. While both Institutes are rightly critical of China’s more recent
excursion into direct interference in national politics around the world, ASPI in particular has
adopted a markedly hard-line approach to China, providing deep and sustained criticism of
China without much by way of ameliorating commentary on how Australia needs to manage
its relationship with China, except by imposing more barriers and constraints on the
relationship by ‘calling China out’.

One of the smallest, but also one of the most influential (as recent media reporting would
have it – see below), is China Matters. Like the other independent institutes China Matters
hosts seminars and discussion events, policy dinners, study tours to China as well as
discussion papers (often papers delivered at its national meetings) and policy briefs
generally written by co-opted authors. Many were surprised to learn of the Australian
government’s decision to cut funding to China Matters ostensibly on the grounds that it has
been “using taxpayer funds to boost Beijing’s agenda”.26

The News Limited organ The Daily Telegraph claimed that the Attorney General was
reviewing the three-years forward funding that the Attorney-General’s Department had
agreed ‘in principle’ to provide. The newspaper article claimed that China Matters had been
“lobbying against Australia’s national interests”. China Matters has maintained high level
access to senior government Ministers, senior members of the Opposition and senior
government officials since its inception. The suggestion that these individuals could be
manipulated and manoeuvred into supporting China’s interests over those of Australia, for
which they are responsible, is preposterous. China Matters has, from time to time, taken
positions on individual policy issues that differ from those of the government, or from the
position that the government might eventually adopt. But that is the nature of
independence.

The specific grounds for the Attorney-General’s decision are unknown. China Matters, with
its corporate links, does argue for a more moderated Australian response to China,

26
  See Ellen Whinnett, “China Matters government funding cut over concerns it is acting against Australia’s
 interests”, The Daily Telegraph, 14 June 2020
 https://www.dailytelegraph.com.au/subscribe/news/1/?sourceCode=DTWEB_WRE170_a_GGL&dest=https%
 3A%2F%2Fwww.dailytelegraph.com.au%2Fnews%2Fnational%2Fchina-matters-government-funding-cut-
 over-concerns-it-is-acting-against-australias-interests%2Fnews-
 story%2F31755b5819b8833824212eceadd7f13d&memtype=registered&mode=premium#command-form

     Australia-China Relations                                                                           9
preferring diplomatic channels for the discussion of differences to the domestic political
megaphone. Whether the loss of government funding will put China Matters out of business
is uncertain. But the loss of a different voice, in a tiny market that is dominated by voices
stridently opposed to China, would further erode government’s access to independent
advice. As John Fitzgerald pointed out some years ago, without stable and predictable
funding, the university research centres and the think tanks can sink as quickly as they
surfaced.27 He also pointed out the dangers associated with rescue packages provided by
donors with particular expectations, impacting on the independence and objectivity of the
research centres.

While there is an increasing number of China-born Mandarin speakers in Australia, the
number of non-Chinese heritage Mandarin speakers with high levels of proficiency is
extremely low. An ‘educated guess’ suggests that there may be no more than 130 such
Mandarin speakers in Australia,28 some of them working as translators and others working
on communications and marketing matters in the corporate sector. When it is difficult to
identify more than twenty individuals in Australia who are recognised contemporary China
experts, the poverty of Australia’s China expertise becomes clear. And when that is put in
the context of almost no specialist school for training China politics and international
relations specialists, the situation is even more dire.

RESETTING THE POLICY MINDSET

In a disrupted world, how Australia manages its relationship with the dominant regional,
and potentially global, power matters. China is here to stay, and no amount of Australian
stridency changes that fact. Yet the hyperbolic language that surrounds the so-called ‘China
debate’ in Australia represents the issue as a choice between one or both of two confected
binaries. Australia must ultimately choose either Washington or Beijing. Alternatively,
Australia must choose to ‘stand and fight’, defending its sovereignty, or it must ‘surrender’.

27
   See John Fitzgerald, “University China centres are vulnerable to vested interests because of a lack of
  funding”, The Conversation, 2 November 2016 https://theconversation.com/university-china-centres-are-
  vulnerable-to-vested-interests-because-of-a-lack-of-funding-67554
28
   See the RMIT ABC Fact Check item “Are there only 130 Australians of non-Chinese heritage who can speak
  Mandarin proficiently/”, 24 June 2019 https://www.abc.net.au/news/2019-06-24/fact-checka-are-there-
  only-130-people-who-can-speak-mandarin/11235484

     Australia-China Relations                                                                          10
But as Iain Henry has pointed out,29 the issue is not one of sovereignty or surrender,
because Australia retains its agency. We can choose to amplify contested issues, or we can
choose to deal with them in a way that is both measured and resolute.30 That is generally
how our Asian neighbours approach the problem. But however Australia decides to address
its relationship with China, it must be seen to be acting clearly in its own interests, and not
as a US franchise.

This requires a return to the deliberate, measured diplomacy that is the key to progressing
our national interests in a highly contested regional and global environment. This in turn
demands the four complementary tools of the diplomatic craft: deep subject matter
experience and knowledge; advocacy; negotiation; and the building of coalitions. They are
all difficult to achieve, since they demand creativity and initiative, intelligence and tact,
patience and prudence, deliberation and measure, research and analysis, and above all
constancy and endurance – qualities that have not been particularly evident in Australian
diplomacy in recent years.

It also requires openness to as variety of views and suggestions. There are always options in
the management of complexity and uncertainty. Bloviation and stridency are not signs of
strength, any more than deliberation and measure are signs of weakness. Nor is the creation
of ideologically driven and essentially undergraduate affinity groups, such as the so-called
“Wolverines” in the Australian Parliament a recipe for evidence- based and objective policy
making.31 There is something disappointing and pathetic in a feeble Australian attempt to
channel China’s “Wolf-Warrior Diplomacy”32 in an open democracy such as Australia enjoys.
The pugnacious and aggressive character of China’s “Wolf Warrior Diplomacy” (also based
on a movie meme) may boost national pride and patriotism in China, but there is little
evidence that it works. China would do well to take the advice of the former Chinese
Ambassador to Australia, Fu Ying, who suggests that her diplomatic colleagues should
uphold “the spirit of humility and tolerance, and adhere to communication, learning and
openness”.33 Australia would do well to take the same advice.

29
   See Iain Henry, “The false dichotomy at the heart of Australia’s China debate”, The Interpreter, Lowy
  Institute, 18 May 2020 https://www.lowyinstitute.org/the-interpreter/false-dichotomy-heart-australia-s-
  china-debate
30
   On this point, see Gareth Evans, “How not to respond to China”, AsiaGlobal Online, 18 June 2020
  https://www.asiaglobalonline.hku.hk/how-not-respond-china
31
   See Alice Workman, Secret code gets its claws into Canberra”, The Australian, 4 March 2020
  https://www.theaustralian.com.au/commentary/strewth/strewth-coalition-labor-mps-form-canberra-wolf-
  pack/news-story/295bfe1ecb6a50fe8966821ab9d489e7
32
   See Zhiqun Zhu, “Interpreting China’s ‘Wolf-Warrior Diplomacy’ “, The Diplomat, 15 May 2020
  https://thediplomat.com/2020/05/interpreting-chinas-wolf-warrior-diplomacy/
33
   Ibid.

     Australia-China Relations                                                                          11
Alienation never leads to accommodation. But when alienation is backed by economic
power and armed force, it may force appeasement. Australia’s parliamentarians need to
learn the difference.

   Australia-China Relations                                                            12
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